KNOT Offshore Partners LP Q4 FY2025 earnings call

Sponsor KNOT's unsolicited non - binding offer to buy publicly owned common units was received in Q4, with mutual decision to conclude discussions with no transaction recommended. Q4 financial and operational headlines included revenues of $96.5 million, operating income details, net income details, adjusted EBITDA of $59.3 million, etc. Developments in Q4 included entering a $71.1 million senior secured term loan facility to refinance Nova Knudsen, Vigdis Knudsen transitioning from time charter to bare boat charter, completing second RCF refinancing, and agreeing time charter for Fort Laser Knudsen with KMOT. Termination of discussions around KNOT's offer in Q1. Q4 had strong utilisation and financial results, refinanced facilities, secured additional charter cover and paid quarterly distribution. Balance sheet strengthening, debt maturity profile with material repayment obligations later in the year, Petrobras' five - year plan providing insight into Brazilian offshore market.

Q4 revenues were $96.5 million. Operating income was $8.4 million on a fully reported basis, or $28.6 million when excluding the impact of the impairment on Bodal. Net income on a fully reported basis was a loss of $6.2 million, whereas it was net income of $14 million when excluding the impact of the impairment. Adjusted EBITDA was $59.3 million. As of December 31, 2025, there was $137 million in available liquidity, composed of $89 million in cash and cash equivalents plus $48 million in under - owned capacity on credit facilities. Operated with 99.5% utilisation, with overall utilisation of 96.4% taking into account scheduled dry docking. Declared a cash distribution of 2.6 US cents per common unit in February.

Look to a $220 million five - ship facility in September 2026 and a $65 million single - ship facility in October 2026, secured by Lever Knudsen. Historically benefited from wide pool of lenders, attractive bank finance and key lender relationships. Average margin on floating rate debt during Q4 was 2.2% over SOFA.

Non - cash impairment related to Baird organisation risk, uncertainty in refinancing, market supply - demand balance risk, asset depreciation risk.

Q: Frederick Dubois asked about valuation of KNOP in connection with bond issue, change in vessel useful life, new build shuttle tanker pricing, dividend recovery and annual general meeting.

A: Referred to offering materials for bond valuation, explained useful life is about vessel being under 20 years for client preference, new build pricing is commercially sensitive and not disclosed, capital allocation under continual review by directors, and intention to hold annual general meeting in 2026.

Q: Liam Burke asked about prioritizing adding vessels to fleet, relation of drop - downs to dividends or accelerated debt repayment.

A: Directors keep capital allocation options (distributions, buybacks, drop - downs) under continual review with no direct priority among them